Photo by Nicola Barts If you turned 72 last year and didn't take your first required minimum distribution (RMD) by Dec. 31, 2022, you have a few days to take the mandatory withdrawal. April 1 is your deadline to take out the specified amount from your tax-deferred retirement savings account(s). This year, however, is the last one for the age 72 RMD trigger. The latest retirement law changes in the Setting Every Community Up for Retirement Enhancement (SECURE) Act 2.0 changed the RMD starting age to 73. However, there's been a bit of confusion about the change. Some people have... Read more →
via Giphy The Internal Revenue Service is exploring how it can offer free tax filing on its own, no help from outside private tax software companies as is now the case. But the agency already offers a sort-of tax prep service. I, and the IRS, emphasize sort of. You still have to fill in some (possibly a lot of) paper forms. And you have to send them by U.S. Postal Service mail by Tax Day, which is April 18 this year. Plus, there are lots of limitations — income levels, forms that don't apply, deduction methods, and more — on... Read more →
In 1896, the first college basketball game was played. Now, 127 years later, the hoopla known as March Madness is big business and big betting. The annual NCAA Division 1 college basketball tournaments, both men's and women's matches, dominate the airwaves, with networks paying millions for the broadcast rights. Fans follow on their in-home televisions, as well as on their mobile devices via the internet. Seeding, schmeeding: The wins aren't just important to the teams, the university cities, or the colleges' alums. Bettors have placed millions on the games, and lots of them have already lost big. Upsets busted brackets... Read more →
Photo by Zac Durant on Unsplash The damage Mother Nature can do is long-lasting. So, in the case of many storms, is the clean-up process. The Internal Revenue Service realizes this. Earlier this year, the agency extended original tax relief, including filing deadlines, it provided individuals and businesses in Alabama, California, and Georgia that were hit by major natural disasters. New York storm victims now have joined this group. A deadly winter snowstorm hit parts of the Empire State around last Christmas. The Federal Emergency Management Agency (FEMA) and the IRS followed up quickly with, respectively, disaster declarations and tax... Read more →
Through March 10, the Internal Revenue Service had issued more than 49 million refunds, which came to a total of $146.2 billion. If you're still waiting on your part of that, you're probably getting a bit frustrated. I get it. You want your cash. At the very least, you want answers as to why it's taking so long for your tax refund to show up in your mailbox or bank account. That frustration is why lots of folks every filing season fall for myths, misconceptions, and just plain wrong information they think will help speed up the delivery of their... Read more →
Photo by Elisa Ventur on Unsplash When you make a mistake on your Form 1040, the best thing that could happen is the Internal Revenue Service will catch your relatively insignificant error, fix it, and send you a notice about the change. A worse outcome is the IRS changes reduce and/or delay the refund you're expecting. And the absolute worst tax error outcome is that your mistake isn't a minor one, and the IRS decides to take a longer, closer look at your filing. The only way to avoid these situations is to double check your return to ensure it's... Read more →
Blinders may work for horses, but they're terrible for taxpayers who might miss out on some tax savings. (Photo by Graham Ruttan on Unsplash) The Tax Cuts and Jobs Act's expansion of the standard deduction amounts means even more taxpayers are using that filing method. Most think that since they don't itemize, they don't need to worry about tax breaks. They're wrong. There are the above-the-line deductions, officially known as adjustments to income, that anyone can take (if they qualify), regardless of whether they take the standard deduction or use Schedule A. Then there are some tax credits, again available... Read more →
If you're in your seventies, it's time to start preparing for nest egg withdrawals, some of which are required by federal tax law. A couple of new retirement laws over the last few years, collectively known as the Setting Every Community Up for Retirement Enhancement (SECURE) Acts, have made a lot of changes to retirement plans and the collection of associated taxes. One revision was the bumping up the date when most older owners of tax-deferred retirement accounts must start taking some money from these savings. Starting in 2023, required minimum distributions, known by the acronym RMDs, don't kick in... Read more →
Photo by Annie Spratt on Unsplash Unless we're getting a big refund, most of us put off dealing with our taxes. That's happening again this filing season. The Internal Revenue Service reports that through March 10, it had received 63.4 million returns. That's about the same number of returns it received at the same point last year. If 2023 filings continue to follow the 2022 pattern, then the IRS is still waiting for more than 100 million returns. Some people have good reasons for the delay. Their tax situations are complicated, taking time to sort through. Others are missing necessary... Read more →
Photo by Andrea Piacquadio Forgiveness of debt piled up by college students has been a campaign mainstay in recent elections. It finally became a reality in August 2022. Sorta. On Aug. 24, 2022, President Joe Biden directed the Department of Education to forgive up to $10,000 per borrower of federally-held student loan debt, $20,000 for those who went to school on Pell grants. The next month, six Republican state attorneys general filed a lawsuit to stop the Biden move. In October 2022, a federal appeals court ordered the loan forgiveness plan put on hold while the case is considered. Now,... Read more →
Photo by Emanuel-Kluge via Flickr When U.S. residents make international moves for work, there's one part of the country that goes with them. They remain U.S. taxpayers, filing federal tax returns on the on their overseas earnings. Uncle Sam, however, does provide some tax breaks to his citizens living and working abroad. Their filing deadline is June 15. Thanks to tax treaties, globally peripatetic taxpayers also get certain foreign earned income exclusions and/or foreign income tax credits. These exclusion amounts also are affected by the cost of living, as noted in Part 8 of the ol' blog's 2023 annual inflation... Read more →
Photo by Chris F In February, Austin took another winter weather hit. A surprisingly heavy freeze ended with broken tree limbs taking out power lines, leaving tens of thousands of Austin households and businesses without electricity for days. We were among the powerless. During the three days we sat huddled in our increasingly cold house, griping about the third consecutive and unusually cold winter (thanks, no thanks, La Niña!), we realized we needed to look into making some improvements to our house. The energy efficient upgrades will also help in a couple of months when we're dealing with the area's... Read more →
It takes a different kind of math to figure possible tax credit help to cover college costs. (Photo by Karolina Grabowska) It's spring break time for many students. But it's also time for a refresher on how the tax code can help them (or their parents who are footing at least some university costs) pay for those classes they're taking a respite from now. The Internal Revenue Code contains two popular educational tax credits, the American Opportunity Tax Credit (AOTC) and the Lifetime Learning Credit (LLC). The AOTC is the one most undergraduate students (or their parents) will claim. It's... Read more →
… and some special instructions for those who owe $1 or less or $1 million or more. While bank checks may seem antiquated to most people today, some people still like to pay that way. That includes writing a check to cover their tax bill. (Photo by Steve Shook via Flickr CC) Since most of us e-file our taxes, it's only natural that when we owe, we pay Uncle Sam electronically, too. But most is not all. Some folks still file paper returns. And some taxpayers who do e-file still prefer to pay with an old fashioned, handwritten paper check... Read more →
Credit cards are a popular way to pay taxes, but there are several other ways to e-pay what you owe the IRS. (Photo by Mika Baumeister on Unsplash) Mark this day. Tax Day is more than a month away, but I finished up the ol' 1040 today. Really! As expected, and as usual, my tax calculations revealed that we owe Uncle Sam a couple hundred bucks. So I went to my Electronic Federal Tax Payment System (EFTPS) account and scheduled payment of our 2022 tax amount for April 18, as well as our 2023 estimated tax payments for that day... Read more →
As a true crime junkie (I blame my first newspaper reporting job covering the police beat) and tax geek, the headline about a senior bank official's guilty pleas to embezzlement and tax evasion immediately caught my eye. The Michigan man, a bank senior vice president, confessed in court on March 6 to embezzling $870,000 from the financial institution between 2014 and 2021. Then he compounded his troubles by involving the Internal Revenue Service. Specifically, according to the press release issued by the U.S. Attorney's Office for the Western District of Michigan, the 56-year-old Grand Rapids man — "… generated taxable... Read more →
Image via CFI Even before film makers began sticking extra scenes at the end of credits, I sat in the darkened theater until the last credit rolled. I do the same when I screen movies and television shows at home … when I can. As I tweeted today, I'd love it if streamers used an artificial intelligence (AI) program to note that I like to watch full show openings. And recaps. And all the closing credits. OK, not so much the information about who's dubbing the actors when the shows are streamed in other countries, but I do use that... Read more →
UPDATE, March 12, 2023: Congratulations to all those who won Academy Awards tonight, especially the big winner, "Everything Everywhere All at Once." The movie, known on social media as #EEAAO (or #EEAO if you don't want to include the preposition) proved that this year's major Hollywood event definitely wasn't your grandparents' Oscars. The wildly imaginative film, which featured a tax audit, won best picture. Three EEAO stars, Michelle Yeoh, Ke Huy Quan, and Jamie Lee Curtis, won acting Academy Awards. And original screenplay and directing Oscars went to The Daniels, Daniel Kwan and Daniel Scheinert. Jamie Lee Curtis, far left,... Read more →